1 eFX Daily colour

1.1 FX Spot

1.1.1 Overview

(Feb-25) Asian stocks experienced their largest drop in three weeks due to US President Donald Trump’s decision to proceed with tariffs on Canada and Mexico and to impose restrictions on Chinese investments. Significant declines were seen in Japan, Taiwan, and Hong Kong. Gold reached a record high on yesterday ($2956.19/oz) due to increased demand for safe-haven assets. Bitcoin and other cryptocurrencies fell, with Bitcoin slipping for the third consecutive day signalling reduced risk sentiments.

In other markets, oil prices rose as investors evaluated new US sanctions on Iran.

  • Gold trades at $2936.50 per ounce, and was up 0.55% yesterday.
  • Oil trades at $75.06 per barrel, and was up 0.78% yesterday.

The rand faced some headwinds at the back on load-shedding announcement to stage 6, now at stage 2.

Against the crosses:

  • EURZAR trades at 19.2380.
  • GBPZAR trades at 23.1946.

Key events today:

  • US consumer confidence, 17h00 SAST.

1.1.2 US

(Feb-19) President Donald Trump announced plans to impose 25% tariffs on automobile, semiconductor, and pharmaceutical imports, with an announcement expected by April 2. He aims to give companies time to establish US-based operations to avoid tariffs. These new levies could significantly impact industries and lead to higher consumer prices, particularly affecting countries like Mexico, South Korea, Malaysia, and Singapore.

(Feb-24) The Trump administration has taken several actions against China, increasing the risk of worsening ties. President Trump issued a memorandum to curb Chinese investment in strategic American sectors and urged Mexico to levy Chinese imports. The US also proposed fees on Chinese-made commercial ships. These moves led to a drop in Chinese shipping stocks and fluctuations in the CSI 300 Index, while the yuan rose 0.2% against the dollar, now trading at 7.2435.

1.1.3 SA

(Feb-17) The Rand remained stable at 18.32 against the $ after a volatile week, initially weakening due to the national budget postponement but recovering with rising global gold prices. The budget delay, caused by disagreements over a proposed VAT increase, is unprecedented and creates uncertainty ahead of the mid-March presentation. Markets are watching for debt consolidation and expenditure cuts in the revised budget.

Over the weekend, we saw a return of load-shedding to stage 6 but Eskom has announced a reduction to stage 4, effective from 00h30 on Monday, February 24th. This decision follows the successful return of most downed units, which has improved the power supply situation.

On the positive side: SA may be eligible to exit the FATF gray list in October, having addressed 20 of 22 items required for delisting. The National Treasury confirmed significant progress in improving the country’s financial security systems, with only two items remaining to be addressed. This progress has been acknowledged by the FATF, which will consider SA’s delisting in its upcoming October review.

1.1.3.1 eFX Volumes

  • Overall volumes

(Feb-19) Saw volumes picking to their highs at the back of the postponement of the budget speech.

(Feb-24) volumes fluctuated around the recent ADV last week, with an uptick on Wed (19-Feb) after budget was postponed to 12 March.

  • Price to volumes

(Feb-21) Rand looks set to trade 18.30 with the latest implied support at 18.05 and before that it was 18.25.

(Feb-24) Clients are happy to be short USDZAR below 18.50, otherwise they are long all the way to 18.85.

  • Liquidity hours across currency pairs
  • Currency positions

(Feb-20) Growing optimism on ZAR, in-fact both importer and exporters happy to trade at these lvls. Both dealing in big tickets.

(Feb-24) Rand opens slightly under pressure today.

1.1.3.2 USDZAR levels

(Feb-24) Clients are happy to be short USDZAR below 18.50, otherwise they are long all the way to 18.85.

  • ZAR facing negative sentiments after load-sheeding announcement
  • ZAR facing positive sentiments since may be eligible to exit the FATF gray list in October.
  • ZAR volume weighted price has reduced to 18.35.
  • Range for today 18.50 - 18.25. Thus, we remain rand positive.

(Feb-25) All eyes on SA CPI tomorrow. Expecting a relatively quiet day, range still at 18.50 - 18.25.

1.1.3.3 USDZAR spreads

(Feb-20) The ZAR seems to now be benefit fitting from a weaker $ environment which is also coupled with Gold hitting all time highs and the confirmation by the President that there won’t we a fallout in the GNU following the budget issue.

(Feb-24) Rand held the 18.35 VWAP lvl and the 18.50 - 18.25 range. Importers are happy to trade at these lvls while exporters are staying on the side-lines.

(Feb-25) SA CPI tomorrow is expected to be a catalyst for the next ZAR move, for now, we have mainly traded at that 18.35.

1.1.4 Key events this week:

  • US consumer confidence, Tuesday
  • Nvidia earnings, Wednesday [re Deepseek AI model re]
  • Germany CPI, unemployment, Friday
  • India GDP, Friday
  • Japan Tokyo CPI, industrial production, retail sales, Friday
  • US PCE inflation, income and spending, Friday
  • Chicago Fed President Austan Goolsbee speaks, Friday

1.2 FX Volatility Update

1.2.1 Update

By Thuto Mukena - Institutional Sales Specialist (Feb-25)

  • Overview

The ZAR remained range-bound, trading between R18.4339/$ and R18.2823/$, as markets positioned ahead of tomorrow’s local CPI print. Consensus stands at 3.3% y/y, though the release originally scheduled for last week was delayed as Stats SA conducted additional data verification. Yesterday, the ZAR closed slightly weaker at R18.3623/$, with local implied vols edging lower. The 1-week tenor fell 0.36 vol pp from the open as Eskom reduced load-shedding on Monday, easing some market weekend concerns.

  • G10 & EM

The road to U.S. tariffs continues, with Trump confirming that planned tariffs on Canada and Mexico will take effect next month. On the vol front, 1-week implied vols broadly tracked lower, in line with spot moves. However, USD/CAD and USD/MXN were the outliers, with their 1-week implied vols rising by 80bps and 73bps, respectively.

1.3 Africa

1.3.1 Update

By sizwe Mfayela - Institutional Sales Specialist (Feb-25)

  • Angola
    • The IMF has highlighted Angola’s oil dependence and high external debt as factors weighting down on the nation’s economic growth. The IMF states this calls for structural reforms as risks remain to the upside.
    • Angola is in negotiations with a Spanish lender - Banco Bilbao Vizcaya Argentaria SA (BBVA) for a $1bio loan to invest in a range of the country’s economic sectors to help diversify revenue sources and reduce dependence on oil production.
  • Ghana
    • President John Mahama nominated Zakari Mumuni as the deputy governor of the Bank of Ghana.
  • Kenya
    • Kenya is currently planning to issue new Eurobonds to buy back $900mio of the Eurobonds maturing in 2027in efforts to proactively manage its external debt. The bonds will be a 10Y tenure, and the amount to be raised is yet to be specified.
    • The IMF is planning to visit Kenya next month for the ninth and final review of the country’s $3.6bio program that is set to expire on the 1st of April this year.
  • Nigeria
    • Yesterday’s government bond auction was oversubscribed. The 2029 and 2031 maturity bonds cleared at 19.2% and 19.33% respectively, with the 2031s receiving NGN 1.167trio of bids and sold NGN 605 bio against an initial offering of NGN 150bio.
  • Tanzania
    • The East African nation raised a $300mio syndicated loan to finance development projects for the 2024/25 fiscal year ending June.
  • Eurobonds
    • GHANA curve extension / cash take-out trades clearly going through, with the 29s -> 35/37 switch being put on.
    • KENINT opened bid, with locals buying bonds from the 31s out. By the time the LM exercise headline came out, flows were two-way albeit thin, and they stayed that way while the curve steepened on the back of the expected 10Y issuance.
    • SENEGL underperformed, with sellers from the get-go on the back of the Moody’s downgrade on Friday.
    • SOAF flows were thin in general but duration continued to be bid, similar to SAGBs. RM accounts were buyers in general, while ETF flows were two-way. HF client set were rather quiet. Few questions asked around why the ESKOM headlines did not show on the curves.

1.3.2 Economic data

Economic data releases